TY - UNPB
T1 - Trade Balance Dynamics and Exchange Rates: In Search of the J-Curve Using a Structural Gravity Approach
AU - Badinger, Harald
AU - Fichet de Clairfontaine, Aurélien
PY - 2018
Y1 - 2018
N2 - This paper uses a structural gravity approach, specifying currency movements as trade cost component to derive an empirical trade balance model, which incorporates multilateral resistance terms and accounts for the cross-country variation in the exchange rate pass-through into import and export prices. The model is estimated using quarterly bilateral trade flows between 47 countries over the period 2010Q1-2017Q2, disaggregated into 97 commodity groups. Our results support the existence of an "aggregate'' J-curve, pooled over commodity groups; at the same time they point to considerable heterogeneity in the trade balance dynamics across industries below the surface of aggregate data.
AB - This paper uses a structural gravity approach, specifying currency movements as trade cost component to derive an empirical trade balance model, which incorporates multilateral resistance terms and accounts for the cross-country variation in the exchange rate pass-through into import and export prices. The model is estimated using quarterly bilateral trade flows between 47 countries over the period 2010Q1-2017Q2, disaggregated into 97 commodity groups. Our results support the existence of an "aggregate'' J-curve, pooled over commodity groups; at the same time they point to considerable heterogeneity in the trade balance dynamics across industries below the surface of aggregate data.
UR - https://www.wu.ac.at/economics/forschung/wp/
U2 - 10.57938/2bea935a-b481-463e-a5cc-0daa14852fb5
DO - 10.57938/2bea935a-b481-463e-a5cc-0daa14852fb5
M3 - WU Working Paper
T3 - Department of Economics Working Paper Series
BT - Trade Balance Dynamics and Exchange Rates: In Search of the J-Curve Using a Structural Gravity Approach
ER -